The name of the town of Gmünd derives from the Gemünde, the confluence of the Lainsitz and Braunau rivers. This location was mentioned in 1179 in a charter of Emperor Frederick Barbarossa as a border point between Austria and Bohemia. The decision followed long disputes over the settlement of the Bohemian Forest, during which both the Přemyslids and the Babenbergs, with the help of their ministeriales—particularly the Kuenring family—had advanced territorial expansion, though the borders remained unclear.
Although the name of this locality does not yet appear at that time, people may already have lived permanently nearby in 1179. Its favorable position at a crossing over the Lainsitz—a ford near today’s bridge on Litschauer Street—made the site attractive for trade and travel.
Around the year 1200, Hadmar II of Kuenring had a settlement deliberately established at this spot. The place at the Gemünde thus developed into a fortified stronghold in the border region. Today, the castle, the parish church of St. Stephen, as well as the layout of the town and the remains of the town wall, recall the early years of Gmünd.